Coalition recommends export control reforms

Industry groups on Tuesday released a list of recommendations to
overhaul the system that controls the export of sensitive technologies.

The disparate coalition of trade associations, which represent a large swath of industries, are weighing in as both the Obama administration and Congress ramp up efforts to scrub the export-control system, seen by many as a relic of the Cold War.

{mosads}President Barack Obama in August ordered an extensive interagency review of export controls, and Rep. Howard Berman (D-Calif.), the chairman of the House Foreign Relations Committee, said he plans to introduce legislation to overhaul the system this year.

The export-control system is intended to protect sensitive technologies that could be used for military or commercial purposes. Critics say sensitive technologies sometimes slip through, while restrictions on the trade of some goods widely available only have the effect of hurting U.S. companies.

The National Association of Manufacturers (NAM), Aerospace Industries Association (AIA), National Foreign Trade Council (NFTC) and TechAmerica are all part of the Coalition for Security and Competitiveness, the group that released the recommendations.

 The coalition’s recommendations, sent to Obama on Monday, highlight the need for drawing clear lines of agency responsibility to properly safeguard technologies.

Also, the coalition is pressing for the revision and reduction of the control lists that restrict exports.

“Many items are controlled at inappropriate levels even though they are widely available worldwide and are no longer state-of-the-art,” the coalition’s recommendations state.

 The associations want to see more cooperation with U.S. allies to come up with common objectives and procedures for controlling exports. They also want to accelerate exports to “end-users” that have proven trustworthy.

The coalition also suggests more assistance for small and medium-sized enterprises, which need help with application procedures and compliance programs.

Meanwhile, the administration has formed an interagency team consisting of career staff that is compiling a list of all possible reforms to the system, each idea with its pros and cons, according to a source familiar with the process.

The group is expected to hand in its report to the Cabinet secretaries by the end of this month. After that, the principals — the secretaries of Defense, State and Commerce, the National Security Adviser and the Economic Council director — will decide how to move forward.

Congress also is slated to start a series of hearings on the overhaul of export controls. The first hearing of the House Foreign Affairs Committee will be Friday in Palo Alto, Calif. The location is not a coincidence, but rather is meant to harvest the expertise of people from Silicon Valley, said a congressional source who asked not to be quoted by name.

{mosads}More hearings will be scheduled in Washington in a matter of weeks.

House committee staff is also on track to finish drafting overhaul legislation this winter, said the congressional source. The draft legislation will serve as the basis for lawmakers to decide how to proceed, the source said.

Trade association officials on Tuesday expressed confidence that unlike previous efforts this year’s push for reform is likely to be successful.

“The administration, the Hill and industry all pretty much are on the same page,” said Catherine Robinson, director of high-tech policy at NAM. “We are all in agreement as to what the problems are and generally what the fixes to the system need to be, and I think that is going to allow this to be a more successful effort than in the past.”

“We genuinely expect action from the administration,” said Remy Nathan, the assistant vice president for international affairs at AIA.

Another reason for the optimism is due to the decision by Defense Secretary Robert Gates to stay on for at least another year. Gates has been the “engine” behind the interagency process, said Bill Reinsch, the president of NFTC.

“DoD [the Department of Defense] is looming large over almost everything we are talking about here, whether it is coming down to evaluating technology, evaluating the parameters of technology exchange with our closest allies [or] the defense industrial base,” Remy said.

Export controls “impair” the defense industrial base from growing rapidly in the future, said Frank Vargo, NAM’s vice president for international economic affairs.